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The Pastoria Family, Studio City, California
Jon Pastoria, 38, is a corporate recruiter, a financially savvy entrepreneur who makes decent money. But being sophisticated about finances is no match these days for the depredations of California's health insurance system, whose abuses are now striking down the middle class in the same way they've always struck down the poor.

After years of struggling to provide basic health care for his wife and two sons, Jon has finally resorted to taking out catastrophic health insurance, which provides coverage only in emergencies. It was a last option, but health insurers forced Jon into it after years of mistreating his family.

"You feel like you're being screwed to the point where you have no hope, " Jon says. "You have two choices: Go along (with whatever insurers offer) or go without health insurance."

Jon and his wife Susan moved to Southern California from Michigan in the mid-1990s, ultimately moving to Studio City. Susan gave birth to Nick, prematurely, in 1996. He spent two weeks in intensive care. Jon's huge medical bills kept getting worse as Blue Cross regularly raised rates Annoyed, Jon nevertheless was handling the costs. Then, one day, Blue Cross, which had raised his rates three times in one year, raised them again. Thinking "this is ridiculous," Jon in October 2001signed on with Nationwide Health Plans, which had been Cal Farm Insurance.

The insurer made him take out two policies - one for Susan and the kids (Anthony had joined the family), and a separate one for Jon, who had always had an "erratic heartbeat," although he has never had any heart problems.

The practical effect was to make him pay two separate deductibles. In addition, Nationwide jumped his premium by 50 percent. Jon didn't like it, but he felt it was a better deal than Blue Cross offered. The two premiums combined cost $473.

Two months later, Nationwide socked it to the Pastoria family. It increased premiums by $2,088 annually ($174 per month) and added new deductibles, when they originally purchased zero deductible policies, that tacked on another $2,000 to the Pastorias' annual tab.

Jon finds it hard to believe that Nationwide did not know when they signed him up in October what they were going to do to him in December. "We had switched to them because Blue Cross had increased our premiums over three times in one year," and Nationwide was advertising a better deal. It was a classic bait and switch. But they felt stuck. To go on another Nationwide plan, or to another insurer, they would have to start the underwriting process all over again.

The 'pre-existing condition" - his erratic heartbeat - would have cost him all over again, or perhaps led to him being turned down altogether. And, as Jon notes, even if you do switch, "what's to keep them from raising rates again, and again, and again."

Enraged, Jon filed a class action suit against Nationwide, but the judge spent only five minutes on his case before dismissing it. Jon has appealed. Meanwhile, the Pastorias received another letter from Nationwide - with another hefty increase.

Jon finally went to catastrophic coverage, which has relatively low premiums but huge deductibles and really is of use only in "worst-case scenarios." He is trying to get back on Blue Cross, as the lesser of evils.

To Jon, the bottom line is that, for the individually insured there is no control over health insurers. "They know they've got you by the balls," he says.
The strain on the family is palpable. "It definitely makes you think twice about going to the doctor," Jon says. The extra money the family pays for health care comes from other family needs - the number of days Anthony attends pre-school, for example.

The quixotic quest to take care of one simple thing - his family's health - seems never-ending to Jon. And the quandary is spreading. "Access to affordable health insurance affects everyone, from the poor to the middleclass. The situation is only going to get worse."

The government needs to provide oversight, Jon says. It should limit the number and percentage of increases. It should crack down on bait and switch tactics. "Individual policyholders have no leverage; we need all the help we can get."